Economic governance

It is increasingly evident that the European Commission has no intention to return to the tight cash-for-reform system to manage the recovery funds and that ‘hawkish’ member states could find it difficult to turn the proposed procedure into a troika-type oversight.

The economies of EU countries will shrink by 7.4% this year as the coronavirus crisis is set to cause the worst recession in the bloc’s history, according to the European Commission's spring forecast presented on Wednesday (6 May), which also foresaw a significant rebound in 2021.

The European Commission estimates the economic impact of the coronavirus outbreak could be greater than the financial crisis in 2008. In order to keep the economy running, the EU executive introduced flexibility for funds and national expenditure, member states approved...

EU member states took the unprecedented decision to suspend the Stability and Growth Pact obligations on Monday (23 March), in order to allow billions of euros in extra spending to mitigate the "severe economic downturn" caused by the coronavirus.

The European Commission proposed for the first time on Friday (20 March) the activation of the general escape clause that would ‘pause’ the adjustments member states have to do to meet their fiscal targets and allow them to spend "as much as they need".

France's finance minister said Tuesday (17 March) that he was willing to nationalise large companies to protect them from bankruptcy, while warning that the country faces recession this year as the coronavirus epidemic sinks the economy.

The European Commission said on Friday (13 March) that the coronavirus COVID-19 will “very likely” push the European economy into recession this year, and warned that the rebound next year will depend on a bold response from member states.

The International Monetary Fund called on governments worldwide Monday (9 March) to join forces and roll out aggressive financial supports for the coronavirus-infected global economy, including direct payments to workers and businesses.

The European Commission will be "flexible" with Italy and other member states affected by the coronavirus when assessing their efforts to balance their public accounts, European Commission vice-president Valdis Dombrovskis said in an interview.

The European Commission won't consider the effects of the coronavirus outbreak in its updated growth forecast, expected on Thursday (13 February), saying it is "too early" to estimate the impact of the virus on the region’s output, EU sources told EURACTIV.

Speaking to EURACTIV in Davos, Eurogroup President Mario Centeno remained hopeful about the eurozone's stalled reform process, saying there are “good reasons” to support ‘green’ investment as part of a broader review of EU fiscal rules due later this year.

The monetary stimulus has been one of the main engines of growth over the past years, but continuing with the supply of 'cheap money' could hurt low-income countries, fuel risky investments and affect savers, warned the IMF on Friday (24 January).

ECB chief Christine Lagarde on Thursday (23 January) said the bank would study what role it could play in combatting climate change as part of a major policy review, warning of "the danger of doing nothing".

As monetary policy nears its limits to lift the world's sluggish economy, the International Monetary Fund told governments on Tuesday (21 January) to introduce "more automatism" in their fiscal rules in order to counter the economic slowdown.

After seven years of growth, the eurozone's outlook is deteriorating. There is a risk of a recession if the trade war with Washington worsens, while member states continue to disagree over the completion of the economic and monetary union that would help them cope with a downturn.

The European Central Bank should not favour so-called "green" assets in its multi-trillion-euro bond-buying programme or its work as bank supervisor, incoming ECB board member Isabel Schnabel said in an interview published on Monday (30 December).

The European Commission is cautious about loosening EU fiscal rules in order to incentivise ‘green’ investment by member states. Valdis Dombrovskis, the Commission Vice-President for the economy, said on Tuesday (17 December) he wants to avoid “divisive” issues.

Italy's prime minister Giuseppe Conte claimed victory on Friday (13 December), after changing the wording of the Euro summit's conclusion postponing a final agreement on the reform of the eurozone bailout fund.

Tensions between Portuguese prime minister, Antonio Costa, and his finance minister and Eurogroup president, Mario Centeno erupted in front of EU leaders on Friday (13 December) as the two clashed over the design of the eurozone budgetary instrument .

The European Central Bank will next year review its tools and objectives in order to better fulfil its mandate of price stability, and it also intends to assess the appropriateness of issuing its own digital currency, in the face of growing concerns about Facebook’s Libra.

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